Leaders of eurozone economies
agreed early Friday to use funds from a permanent rescue mechanism that will
come into force next month to recapitalize troubled banks in the
single-currency region. 
Danish Prime Minister Helle Thorning-Schmidt (2nd L), European Council President Herman Van Rompuy (2nd R), and European Commission President Jose Manuel Barroso (1st R) attend a press conference during the EU summit at EU's headquarters in Brussels, capital of Belgium, late on June 28, 2012. Top leaders of the European Union (EU) have not agreed on a compact for growth and jobs yet, but a package of growth initiatives worth 120 billion euros (about 150 billion US dollars) to help the most vulnerable economies in the bloc, Van Rompuy said Thursday night. (Xinhua/Ye Pingfan)
European Council President Herman Van Rompuy said at a press conference following a eurozone summit that direct recapitalization should be based on certain conditions and that this could be done only when an "effective single supervisory mechanism" is established, which would involve the European Central Bank (ECB).
The recapitalization must comply with the aid rules of member states, and needs to be institution- and sector-specific, Van Rompuy said, noting the plan that would cover the entire economy would be formalized in a memorandum of understanding (MOU).
He also urged a rapid conclusion of the MOU attached to the financial support to Spain's banking sector, and pledged that the financial assistance would be provided by the European Financial Stability Facility (EFSF) until the European Stability Mechanism (ESM) becomes available.
Van Rompuy said the summit entrusted himself, along with the presidents of the European Commission, the Eurogroup and the ECB, to draft a specific schedule for a genuine economic and monetary union.
He promised to present the first report in October.
He reiterated that the presidents would consult European institutions, including the European Parliament, during the process.
The summit also welcomed the ECB's agreement to serve as an agent to EFSF/ESM in conducting efficient market operations.
The Eurogroup is expected to implement the agreements reached at the summit by July 9.
The meeting of eurozone finance ministers would also examine the Irish financial sector in hopes of further improving the sustainability of its aid program.
VietNamNet/Xinhuanet
